Before the beginning of the upcoming festive season, a relief news has emerged for common consumers, housewives and sweets traders. Just before big festivals like Rakshabandhan, Ganesh Chaturthi, Dussehra and Diwali, a big improvement has been seen in the rapidly rising sugar prices. Within the last 10 days, sugar prices have fallen by about 20 percent in the wholesale and ex-mill markets. This sharp fall in prices has been recorded after concrete steps taken by the Central Government to ensure adequate supply of sugar in the market and to curb speculation.
The recent policy decisions of the Central Government have become the biggest reason behind this sharp fall in sugar prices. The government has allowed duty-free import of 10 lakh tonnes of raw sugar to end the supply crisis in the domestic market.
With this, 3 to 3.5 lakh tonnes of processed refined sugar held by Indian refiners, which was originally reserved only for export, has been immediately approved to be sold in the domestic open market. The sudden arrival of additional 3 lakh tonnes of sugar in the market loosened the grip of speculators and led to an immediate softening of wholesale prices.
After government intervention, a sharp correction in prices has been seen in the markets of major sugar producing states of the country.
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Maharashtra (Kolhapur): The prices of ex-mill sugar in the mills of Kolhapur, which had reached Rs 58 to Rs 60 per kg, have come down to Rs 48 per kg.
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Uttar Pradesh: Even in the major mills of UP, the wholesale price of sugar has come down to around Rs 53 per kg.
According to industry body Indian Sugar and Bio-Energy Manufacturers Association (ISMA), the positive impact of the government's decisions has started to be seen and the direct benefit of the 20% decline at the mill level is sure to reach the common consumers in the retail markets in the next few days.
According to officials of the Ministry of Food and Public Distribution, the sudden rise in sugar prices in the past few days was due to speculation and hoarding by traders rather than actual shortage.
To control prices, the government has set stockholding limits for bulk buyers, confectionery manufacturers, soft drink companies and large sweet sellers. Under the new rules, units using more than 10 tonnes of sugar in a month cannot store stock of more than 15 days' requirement. Due to this strict rule, efforts to create artificial shortage in the market completely failed.
During the festive season, there is a huge increase of 25 to 30 percent in the demand for sweets, packaged foods, biscuits and beverages in the country. The ministry has clarified that there is sufficient buffer stock of sugar in the country to meet domestic needs till the new crushing season starting from October 1.
Due to the upcoming import of 10 lakh tonnes and the activity of domestic refineries, the supply chain will remain completely uninterrupted in the coming weeks, due to which the sweetness of the festive season will not be bitter and sugar will continue to be available to the general public at reasonable prices.